G20 Summit: India has launched itself on the big stage
India has created a benchmark for future G20 summit to ensure that the global community continues to work towards a shared goal in an innovative way and that has just taken India a step closer to Vishwa Guru, says Barclays Vice President Shishu Ranjan
With the curtains coming down on the G20 Leaders' Summit, India has launched itself on the big stage of global leadership, and that too in style. The New Delhi G20 declaration, released on the first day of the summit, established India as a leader, steering the global community towards 'One Earth, One Family, One Future' in an era dominated by global trust deficit.
The trust deficit is on account of the Covid-19-triggered global recession and the ongoing Russia-Ukraine war that has stretched over one-and-a-half years now. Since the global crisis, India’s role in global platforms has been on an accelerated path for a number of reasons.
First, India helped a number of countries during the global pandemic with the supply of essential medicines and COVID-19 vaccines, even when it was struggling on the domestic front due to economic recession.
Second, India navigated the crossfire between NATO countries and Russia to protect its economic interest and show the world that it has the strength and will to make decisions with out-of-the-box thinking and maintain a balanced relationship with conflicting members.
Third, and most importantly, India’s intent to enlarge the G20 agenda, increase the member nations and execute the summit to perfection showcased to the world that India is now out of its colonial past and ready to unleash Bharat’s thousands of years old principle of “Vasudhaiva Kutumbakam”.
At the end of the summit, the diplomatic and political gains are at the forefront and are being globally appreciated. It is economic gains that are going to have a positive impact not only on the Indian economy, which is growing at the fastest pace in the global community, but also on the global economy which is reeling under recessionary pressure due to high inflation and low growth rate.
G20 already accounts for 85 per cent of the global GDP, 75 per cent of the global trade and 66 per cent of the global population. Now, India ensured the inclusion of the African Union, which consists of 55 member nations, and has increased the potential of global trade.
To ensure the smooth movement of goods among the member states, the India-Middle East-Europe Economic Corridor (IMEC) has been announced. This is going to be an ambitious infrastructure project to rival China’s Belt Road Initiative (BRI) that would connect the Indian subcontinent with Europe via West Asia. If successful, the corridor would lower the cost of trade and help European and American economies fight the ever-increasing inflationary pressure on agriculture and manufacturing goods.
The optical fibre planned to be laid on this route will help the global economy to expand high-speed internet penetration and as a second-order effect, will help the global community to leverage the digital revolution that India has created over the last decade.
Some leading examples in the Indian digital revolution space are Unified Payment Interface (UPI), an almost zero-cost payment system as well as JAM (Jandhan-Aadhar-Mobile) trinity that ensures financial inclusion of the deprived section of the society using a bank account, a unique identification number and Mobile phone.
India’s digital rupee also gained a lot of interest among the central banks of member nations, as this has the potential to be used for international trade at the lowest cost, further reducing the cost of transactions in the volatile international money market.
The infrastructure development as part of the IMEC is an opportunity for Indian firms to transform themselves into global multi-national companies (MNCs) and create not only huge employment opportunities for the Indian community but also add significantly to India’s GDP growth rate.
The launch of the Global Biofuel Alliance is another opportunity that is going to push India’s and the global economy forward. Aiming to triple the green energy capacity by 2030 has huge potential for investment in two things. One, creating machines and plants that generate green fuel and two, manufacturing the tool and equipment that can utilize green fuel.
If these are future economic benefits based on summit declarations, there are already many assured economic benefits that India is set to receive. One, India conducted more than 200 G20 programs in 28 states to showcase its infrastructure growth across regions as well as showcase the diversity and uniqueness of Indian civilization. The real-time beneficiary is the tourism sector which provides growth to various sub-sectors such as transportation, hoteling and restaurants, handicrafts, small-scale industries, local trade, etc.
With most of the Indian cities well connected by air, rail and road, the successful events have created a positive atmosphere for exponential growth in this sector. As India is already running Production Link Incentive (PLI) schemes in 14 sectors and is well complemented by other schemes such as Start-Up India, One District-One Product (ODOP), Make in India, etc., G20 in different parts of the country has opened up opportunities for large scale investments, especially from the MNCs willing to shift their production units outside China.
The successful events during the G20 summit showcased Indian talent in innovating, executing and managing global standard products and services, that are set to attract global attention. The successful landing of Chandrayan-3 on the southern pole of the moon just magnified India’s human and technological resource capabilities and this was quite evident from India’s PM speech when he mentioned this in his inaugural speech.
These are not the only economic impacts that India and the global economy are going to have with the successful conclusion of the G20 summit, but definitely the most visible ones. After all, the G20 New Delhi declaration with 'one earth, one family and one future' in the preamble has ensured that each of the actions listed is going to have positive externalities on the global community and ensures that no one is at the receiving end.
At the same time, India has created a benchmark for future G20 summit to ensure that the global community continues to work towards a shared goal in an innovative way and that has just taken India a step closer to Vishwa Guru.
The author is Vice President-Independent Validation Unit (Model Risk) at Barclays. Views expressed are personal.